WASHINGTON — The government's new program to help small businesses repay their existing debts could end up being both popular and problematic for lenders and borrowers.

The Small Business Administration formally launched the program, America's Recovery Capital, on Monday. The program, which was mandated in the stimulus package, will let lenders make small short-term loans to struggling but "viable" small businesses. Starting June 15, SBA lenders will be able to apply to the agency to lend up to $35,000 to help a small business repay its existing loans.

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